Stuck can't rent/sell what to do??

f1slikki

Hi there guys I'm looking to see if anyone can help, apologies if this is long winded but just really want to try get some help for my family.

My sister has a property which she bought through a government shared equity scheme she has a mortgage for around 75% and a loan from them for the other part which she pays back within 10yrs or when she sells whichever is sooner however after living here for 5yrs she has had to move due to being relocated with work so is having to rent elsewhere for the time being so she thought about renting out her property whilst she is away but she has been advised that as part of her shared equity she cannot rent the property- this was not made clear to her at the time of buying the property by the builders or solicitors, here comes the next problem....

as she cannot rent as part of the shared equity terms she is looking/Housing Association into selling the property.
she has paid to have the property surveyed & the property has decreased in value which was expected due to new built & dip in market over the past 2yrs or so however by the time she pays off the shared equity % she is £20,k short to settle the mortgage.

Spoken to the mortgage company to see if anything can be done as property is sitting empty with the risk of damage ie, burst pipes/damp/rot if this continues, cannot rent and cannot sell due to £20,k shortage and both housing association & mortgage company cannot offer any help.

She is currently having to work all the hours possible to try and save for the £20,k but this is going to take an age as whilst she is paying a mortgage, council Tax etc on an empty property she is paying rent,etc on a property she is having to rent in order to continue in her job.

If anything what can be done in this situation????

Many Thanks in advance..

BitterAndTwisted

Stupid Question Number One: Why didn't she look into all this before she took up the offer of relocation?

f1slikki

no not a stupid question but she only relocated 3 months ago had been living in the property for 5years and she was never made aware of any conditions which stopped her renting property out, she spoke to the mortgage company when she was made aware of relocation and this is why she is now in this predicament, the property has been empty for 3 months so far and she is now getting frustrated paying for 2 properties each month..

Lori007

Maybe she had no choice but to relocate - sadly something that has happened to friends of mine - they either relocate or are made redundant and not a good time to find something else - just a thought

f1slikki

thank you Lori yeah she had to relocate, she has a good job which she enjoys and in the current climate would not get a guaranteed or good job easily,

really just wondering if there is anything that can be done to help her, you would think that they would rather allow her to rent the property out that way it is kept in a good state as opposed to leaving it to rot but no..

poppy10_2

Unhelpful question number two: Why didn't she consider the possibility of this situation before signing up with the shared equity scam (sorry, scheme)?

You say the builder 'did not make it clear' that she wouldn't be able to rent out the house - really it is her responsibility to read the terms and conditions fully before making the biggest purchase of her life, it's not hidden in the small print, it's a very common stipulation with shared ownership schemes.

At the moment unfortunately there is little that can be done to help the situation. She can't sell, regardless of the shared equity restrictions, as she is deep in negative equity. She could switch her mortgage to interest only if the lender agrees, although they will be loathe to do so, and in any case it won't make much of a dent into her overall outgoings each month. She can get the temporary discount on empty council tax properties, but again this will be drops in the ocean. Really she needs to move back into her own house and look for a job within commuting distance, it's not sustainable to pay both rent and mortgage long term in her situation.

f1slikki

thanks guys for your help however I feel more people like to make comment as opposed to guidance, people must go through life never making a mistake or coming across a tricky situation..

she did read her docs but if the builders are selling a scheme then they are or should be liable to tell potential buyers about the exclusions as as well as the selling tricks..

G_M

f1slikki wrote: »

thanks guys for your help however I feel more people like to make comment as opposed to guidance, people must go through life never making a mistake or coming across a tricky situation..

she did read her docs but if the builders are selling a scheme then they are or should be liable to tell potential buyers about the exclusions as as well as the selling tricks..

No one has " made comments as opposed to guidance" unless by 'guidance' you mean waving a magic wand and changing the legally binding terms and conditions of her scheme!

All we can do is explain the limitations of the options available.

As others have said, if someone takes advantage of one of these schemes to get affordable housing, they take on the limitations as well. The responsibility is on the buyer to understand what they are buying.

MX5huggy

And if she did rent it out, and got caught what would the consequences be?

PasturesNew

How far is this relocation? Could she just Mon-Fri/weekly commute in the new place and continue living in her old place? It might work out cheaper, enabling her to save quicker.

She needs to be aware that under her insurance policy on the old place, there's probably a small clause that says it's not allowed to be left empty for more than 30 days at a stretch.

marine2

I think she can sell with market value minus precentage she not pay yet,